Consumer spending power hit a seven-month high in February as higher wage growth, falling inflation and lower petrol costs helped boost confidence.
Britons spent 4.1 per cent more last month than at the same time a year earlier thanks to people spending more on travel and leisure activities around the February half-term, according to figures out today by Barclaycard.
The company, which processes 40 per cent of the £1bn retail credit and debit card transactions that take place in the UK each month, said the strength of the pound has encouraged people to splash out on trips abroad, with travel spending up eight per cent overall.
Hotel spending hit a five-month high, up 9.5 per cent, while airline spending also picked up, growing 3.8 per cent – nearly double the growth seen in January. But while the volume of transactions grew, values fell 7.1 per cent as airlines passed on the effect of lower oil prices. Hotel rooms also cost 1.7 per cent less as overcapacity in the package holiday industry saw prices fall.
Restaurants and cinemas also benefitted from the half-term rush, with spending up 16 per cent and 4.6 per cent respectively even though transaction values fell by 6.1 and 4.5 per cent. Meanwhile amusement parks were up 38 per cent, aquariums by 59 per cent and sports centres 20 per cent.
“After pausing for breath in January to assess their finances post-Christmas, consumers’ higher disposable incomes and the ingrained frugality stemming from the economic downturn are leading to more frequent, but cheaper, spending trips with overall spending up as a result,” Barclaycard’s managing director Chris Wood said.
While consumers splashed out on leisure, fashion retailers suffered a lull in spending following the January sales. Clothing sales growth slowed from 7.4 per cent in January to 4.8 per cent last month while department store spending slowed to 4.6 per cent from 5.8 per cent.
Separate figures from Visa showed slower spending growth in February of 1.2 per cent but also highlighted strong growth in hotels, restaurants and bars, with spending up nine per cent in these categories.